Making Money Alert: Superstorm, Super Election

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It’s been a rough go of it for the entire country during the past several days. Though the worst of “Superstorm Sandy” is over for most Americans, the cleanup and restoration of the damage is just beginning. I first want to extend all of my best wishes to the victims of this devastating tragedy, and express Godspeed to them in returning their lives to normalcy. I also want to congratulate all of those who braved the elements and came to the aid of their fellow citizens. This practice of aiding your fellow man is the way we do things in America. Though we have our disagreements about who should be our next president, or about what the proper role of government is, or about which way the financial markets are headed, when it comes to taking care of our own, we typically do so in laudable fashion.

Now that Hurricane Sandy’s wrath is mostly over, the return to trading on Wall Street has begun. Now, we will see how stocks react. Before the storm took center stage, and before it forced the cancellation of two trading days, stocks had sold off after a plethora of downbeat earnings reports sent shivers through Wall Street’s collective spine. Here we are not talking about some obscure companies falling a bit short of expectations. Rather, we are talking about some of the biggest, most-loved and most-owned bellwethers in the market today.

Some of the corporate names that have left investors feeling less than enthusiastic with respect to their fiscal performance during the third quarter are 3M (MMM), Apple (AAPL) Caterpillar (CAT), DuPont (DD), General Electric (GE), Google (GOOG), Intel (INTC), McDonald’s (MCD), Microsoft (MSFT), United Technologies (UTX) and United Parcel Service (UPS).

The rash of disappointing numbers, along with restrained outlooks for Q4 and the full year, prompted sellers to take control of the market. Last week, the Dow fell 1.77% while the S&P 500 lost 1.48%. The NASDAQ Composite managed to hold its own, sliding just 0.59% on the week.

More importantly, the selling now has taken all three major indices below their respective 50-day moving averages. Historically speaking, this pullback is the first step in a potential correction. The next step would be a breaking of support at the respective 200-day moving averages. If stocks fail to maintain their integrity above these levels, then look out below.

I expect the next several days to be laced with a lot of cautious trading, as everyone will resume their focus on the presidential election. In fact, by this time next week, we will know who the next president is, and that will undoubtedly have a big effect on both the perception and mood of the markets. As always, I want you to be prepared for anything, because as history tells us, things can change when you least expect it.

My Top 10 Commodity ETFs

For the past several weeks, I’ve been providing you with various lists of ETFs that I consider to be some of the top picks in their respective genres and sectors. This week, I have another list for you, and it is my Top 10 Commodity ETFs.

Commodities such as gold, silver, oil, natural gas have become heavily traded of late, as investors seek market-beating returns in these sectors. The table below is the list that I watch when I want to see the overall trend in each of these respective markets.

If you’re looking to put the high potential return of commodities into your portfolio, then start with this list. Be careful, however, because though commodities can provide sizeable returns, they also can be very volatile. As a result, you should make sure you limit your overall exposure to funds in the space.

The Wisdom of Webster

“The contest for ages has been to rescue liberty from the grasp of executive power.”

–Daniel Webster

Next week the country will decide who the next chief executive will be. And though I am not going to tell you who you should vote for, I do want you to remember the quote here from Webster. I know I will have this notion in mind when I cast my vote.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow Alert readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Click here to ask Doug.

To the best within us,

Doug Fabian

P.S. I have good news to offer you during what has been a challenging week. With just days to go until the U.S. presidential election, your investments and personal wealth depend greatly on who wins. That’s why my colleagues and I have prepared a special investment report for you, absolutely FREE of charge. It’s called “Eagle’s 2012 Election Guide: 4 Winning Picks for the Next President.” You’ll learn of four investment recommendations for a Mitt Romney win and four plays for a second Obama term. But that’s not all we’re offering you. The day after the election, on Wednesday, November 7, 2012, at 2:00 p.m. ET, I invite you to sign up to receive the free special report and to join me for a FREE online Post-Election Investing Summit.